The informal sector as a concept emerged in the 1970s and refers to a multiple and meaningful reality for productive units and workers who are outside of regulated economic activities and protected labor relations. The informal economy is an unregistered economy, small firms that are below the thresholds for regulation, with unregistered laborers.

The World Bank estimates 70% of all global economic activity comes from the informal sector. The World Economic Forum finds that in the developing economies like India over 90% of the workforce in informally employed.

The informal sector has become very important not only because of its expansion in many countries but also because this expansion has brought about new manifestations that are increasingly recognized as ways to promote growth and reduce poverty. Informal economic activities are present within both developed and developing countries .According to International Labour Organization, around 2 billion people in the world work in informal economy that includes agriculture, manufacturing , construction, street vending, domestic services, craft and several other occupations. The informal economy is driven by its ability to change its products to fit the wants of the well-off and the constraints of the poor.

India’s informal economy was deliberately created by the late colonial and newly independent state that needed to minimise regulative obligations to labour and small firms. Now India’s informal economy is the biggest in the world with no sector or region exempt.

ROLE OF WOMEN IN THE INFORMAL ECONOMY:

The informal economy in India employs 94% of the country’s female workforce. The work they are involved in is mostly manual labour, agriculture, domestic workers, making garments, rolling incense sticks, wrapping sweets , street wending, weaving baskets etc.

Working in this informal, or grey economy, as it’s sometimes called, leaves women often without any protection of labour laws, social benefits such as pension, health insurance or paid sick leave. They routinely work for lower wages and in unsafe conditions, including risk of sexual harassment. The lack of social protections has long-term impact on women. For example, fewer women receive pensions globally, and as a result, more elderly women are now living in poverty. Even in developed economies, such as in France, Germany, Greece and Italy, women’s average pension is more than 30 per cent lower than men’s.

On 2 August 2015, governments united behind an ambitious agenda that features 17 new Sustainable Development Goals and 169 targets  to be achieved by 2030. These goals and targets seek to realize the human rights of all and to achieve gender equality and the empowerment of all women and girls.

The pandemic has tested and even reversed progress in expanding women’s rights and opportunities. Women have not recovered lost jobs and income, hunger is on the rise, and school closures threaten girls’ educational gains. Women’s participation in government, research, and resource management remains far from equal. Vulnerable groups of women, including migrants, those with disabilities, and those affected by conflict, are frequently left behind. Moreover, despite women’s central roles in responding to COVID-19, including as front-line health workers, they do not have the leadership positions they deserve.

Progress on the SDG (2020-2021) :Gender Perspective:

1. Poverty is rising and loopholes in the social protection leave women more vulnerable.
2. 55% of mothers with newborns receive no maternity cash benefits.
3. Food security is also on rise and more women and young girls are going hungry.(Women’s food insecurity levels 10 % higher than Men’s).
4. Half of refugee girls enrolled in schools before the pandemic will not return back to schools.
5. During pandemic, women with children at home spent 31 hours per week on childcare.
6. Report of violence against girls and women are increasing.
7. Women have suffered steeper job losses than men. The number of employed women declined by 54 million in 2020.
8. Only 1 in 4 parliamentary seats are held by women across the world. In conflict -ridden countries, the representation is still lower.

Women are finding solution for our ailing planet but are not given the platforms they deserve. Women’s unequal decision making power undermines the development at every level. Until progress is accelerated , the global community will fail to reach the goals of gender equality and women empowerment by 2030.

MERITS OF THE INFORMAL ECONOMY:

1. We can learn a lot about how to make the most from minimal resources via the informal economy. It can teach us multiple uses of the same product.
2. There are millions of informal sector businesses around the world that waste nothing although at times the machinery used in such enterprises can be polluting.
3. They are contributing towards green growth through minimal consumption compared to people in the formal sector.

CHALLENGES:

1. 90% of India’s labour force is employed in the informal economy. most workers especially in the construction, transport and domestic service work over 53 hours a week with very few social safeguards.
2. The owners of microbusinesses employing under 10 staffers, represent 50% of the global employment.
3. Three in five people globally work in the informal economy.
4. Over 1.6 billion workers worldwide have been significantly impacted by the Covid-19 pandemic, their earnings have declined by over 60%.
5. 3 in 5 people globally work in the informal economy with factors like distress migration , disruption and climate change affecting them.
6. The sector faces unsustainability and loses official support like loans. Informal workers have few safeguards like healthcare and insurance.
7. The sector is vulnerable to shocks like COVID Pandemic lockdowns, climate change etc.
8. Further the skills of informal workers are often not visible- they are often considered unskilled and unproductive. The workers don’t get social respect despite being core members of a productive economy.

STRENGTHENING THE LIVES OF INFORMAL WORKERS :

1. The informal workers can be organized into collectives where they can access capital and skills to small acts like giving protective gloves to worker lacking these.
2. Providing them healthcare and housing. Organizations like Self-employed Women’s Association (SEWA) are trying to ensure proper housing for them. This is important because most of the workers are home-based for eg. making garments at home.
3. The UN’s Sustainable Development Goal (SDG) 8 talks about decent work and economic growth.

We must acknowledge the tremendous importance of informal economy and should take care of the sector while policies.

According to Ela Bhatt, the founder of SEWA- Workers should just be called informal often implying that they are not part of economic mainstream. They should be called ‘self-employed’ instead.